Is there withholding tax on MMF income in Kenya?

Kenyan provider disclosures commonly reference 15% withholding tax on interest earned, while the Income Tax Act also contains specific rules for registered collective investment schemes. Check the fund's published rate basis and current provider tax treatment.

Are MMF yields shown before or after tax?

It varies by provider disclosure. Some providers state that the published effective annual yield is net of management fees but gross of withholding tax, so do not assume every quoted rate is directly comparable.

MMF Tax Kenya 2026: Withholding Tax, Gross vs Net Yield Explained

A money market fund can advertise a strong annual yield and still leave you wondering: is that before tax or after tax? In Kenya, the answer depends on the rate basis the provider publishes and the tax treatment inside the collective-investment structure.

Quick answer: KRA lists a 15% resident withholding rate for qualifying interest, and Kenyan MMF providers commonly refer to 15% withholding tax on interest earned. But you should not automatically subtract 15% from every headline MMF rate without checking what that published percentage already includes.

Why the tax answer is more nuanced than “15%”

Section 20 of Kenya's Income Tax Act deals specifically with collective investment schemes. It provides that qualifying registered schemes are exempt from income tax except for withholding tax on interest income and dividends as a resident person, subject to the Act. It also says distributions and payments for redemption of units received by unit holders are deemed already tax paid.

That means the fund structure and the provider's published yield basis matter. The cleanest approach for a retail investor comparing MMFs is to check the provider's own disclosure rather than applying a second generic tax haircut to every percentage.

What do providers actually say?

Britam's current MMF disclosure states that its effective annual yield is net of fees and gross of withholding tax. Kuza's current FAQ states that a 15% withholding tax is applied to income earned from its Unit Trust funds.

Those examples are useful because they show that “10% yield” is incomplete information unless you know the basis of the number.

Illustrative example: a 10% gross yield

Suppose KSh100,000 earns a gross KSh10,000 over a full year at an illustrative 10% return. If a 15% withholding tax applied to that interest and the headline figure was gross of that tax, the tax on the KSh10,000 interest would be KSh1,500, leaving KSh8,500 of growth before considering any other product-specific differences.

This is a simple illustration, not a tax calculation for every fund. Actual credited returns depend on the fund's rate basis, fees, changing yields and tax treatment.

Gross vs net: the question to ask

Phrase	What to check
Gross of withholding tax	The published yield has not yet reflected the withholding-tax deduction described by the provider.
Net of fees	Management fees may already be reflected in the yield, but that does not automatically mean tax is.
Net return	Ask exactly which fees/taxes are included; the phrase can be used differently across products.

How AMKA treats MMF rates

AMKA's MMF comparison does not blindly subtract 15% from every published rate. We retain the source figure and date, then encourage readers to verify whether the provider publishes that yield before or after fees and withholding tax.

For a shilling estimate using any rate you choose, use the AMKA MMF calculator. For the other costs around an MMF, see the MMF fees guide.

Frequently asked questions

Is MMF interest taxed in Kenya?

Provider disclosures commonly reference withholding tax on interest, while registered collective investment schemes also have specific tax treatment under section 20 of the Income Tax Act. Check the provider's current disclosure and tax basis.

Should I deduct 15% from every rate I see online?

No. First establish whether the provider's published yield is gross or net of withholding tax and fees.

Is this personal tax advice?

No. Tax circumstances can differ, and laws or provider practices can change. Use this as an educational comparison and verify current treatment with the provider, KRA or a qualified tax adviser where needed.

Primary sources checked

Important: Tax law and product treatment can change. This page is educational, not personalised tax advice. Verify the current provider disclosure and KRA/Kenya Law position before acting.